Good day, everyone, and welcome to the FTI Consulting Third Quarter 2012 Earnings Conference Call. As a reminder, today's call is being recorded. And now for opening remarks and introductions, I would like to turn the call over to Ms. Mollie Hawkes. Please go ahead, ma'am.

Mollie Hawkes

Good morning. Welcome to the FTI Consulting conference call to discuss the company's third quarter 2012 results as reported this morning. Management will begin with formal remarks, after which we'll take your questions.

Before we begin, I would like to remind everyone that this conference call may include forward-looking statements within the meaning of Section 21 of the Securities Exchange Act of 1934 that involve risks and uncertainties. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues, future results and performance expectations, plans or intentions relating to financial performance, acquisitions, business trends and other information or other matters that are not historical, including statements regarding estimates of our future financial results.

For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking statements, investors should review the Safe Harbor statement in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com, as well as other disclosures under the heading of Risk Factors and Forward-Looking Information in our most recent Form 10-K and in our other filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this earnings call and will not be updated.

During the call, we will discuss certain non-GAAP financial measures such as adjusted EBITDA, adjusted segment EBITDA and adjusted earnings per share. For a discussion of these non-GAAP financial measures, as well as our reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures, investors should review the press release we issued this morning.

With these formalities out of the way, I would like to turn the call over to Jack Dunn, President and Chief Executive Officer of FTI Consulting. Jack, please go ahead.

Jack B. Dunn

Okay. Thank you, Mollie, and welcome and good morning to everyone, or good afternoon, depending on where you are. With me today on the call are Dennis Shaughnessy, our Chairman; Roger Carlile, our Chief Financial Officer; and David Bannister, our Chairman of North America.

As is our normal practice, I won't bother to recite the press release but will provide a brief overview of the quarter and a couple of key points as it occurs to us, and then turn it over to Roger for discussion of a couple of items in the quarter and on the radar screen, and then most importantly, turn it over to you for your questions.

First, however, on behalf of our almost 4,000 colleagues around the globe, I would like to express our hopes for a speedy recovery for those who have been impacted by Hurricane Sandy over the last week. Also, a sincere thank you to many of my colleagues across the world who have supported those on the East Coast during their time of need.

As you know, FTI Consulting has offices in Maryland, Massachusetts, New Jersey, New York and Washington DC, so many of our employees and their families, as well as numerous clients, have been directly impacted by the storm. We know it will take some time before life returns to normal, but we are glad that our employees are safe, and our thoughts are with those of you who are dealing with the cleanup process, and there'll be a little bit more on that later on.

As we stated in our press release, third quarter results were in line with our expectations and our recent guidance. As anticipated, the quarter proved to be a tough comparison to last year's record quarter of $414 million in revenues, 11% organic growth and the completion of a very -- the completion of the integration of a very, very successful acquisition.

At that time, like many, we were very optimistic and believed there were signs that the economy, not just here but globally, had changed and was on the mend, and we saw excellent results clearly across the board and around the world. Now 12 months later, it's interesting to note that certain can't-miss economies just a year ago, such as China and Brazil, are facing some different challenges than that of the year-ago runaway growth, while other parts of the global economy, particularly other parts of South America, are seeing much better prospects. When France enacted an income tax yesterday -- income tax cut yesterday, it seems that the only 2 certainties remaining in life now are death and unrest in Greece.

With regard to our performance for the quarter, revenues were $386 million. Adjusted EBITDA was $62.3 million or 16.1% of revenues. Adjusted earnings per share were $0.60. Net cash provided by operating activities in the quarter was a healthy $70.9 million compared to $59.7 million in the prior year quarter, and cash collections were strong at approximately $378 million.

In general, our results reflected what you might expect from around the globe as our diverse platform of service offerings pretty much reflected the markets in which they were provided. As seems to continue to be the case, our results were led by solid performance in Economic Consulting and Corporate Finance/Restructuring.

In Economic Consulting, results were driven by continued strong performance in our antitrust litigation, financial economics, international arbitration and regulatory consulting practices, particularly in energy and transportation, as our expertise, depth and global reach in these fields continued to draw the world's top economic and financial talent to our firm. While there was possibly some slowing in the rate of new case openings in M&A, our retentions in that area remain at record levels, which bodes very well for the future as those cases, hopefully, will turn into actions and would benefit our entire company.

In Corporate Finance/Restructuring, we again met the high end of our quarterly run rate expectations at around $110 million. We saw the mix between success fees and chargeable hours shift a little bit, perhaps as a result of a market shift to alternative fees, and that was in North American bankruptcy and restructuring. And not unexpectedly, we saw demand increase for our health care services. Also not unexpected was real estate continued to be slow.

In Forensic and Litigation Consulting, we saw strengthening demand in our EMEA-based Global Risk & Investigations Practice, which we refer to as GRIP, and strong contributions from new senior hires. Our Latin American GRIP practice also saw strength with new engagements in Brazil and Colombia. Core North America was down year-over-year, including our enterprise data analytics practice, as several of the mega-cases that were at their high points last year have been tapering off or ending in the intervening 12 months.

In Technology, pricing continues to be competitive, while the investment in our sales force seems to be paying off, as the rate of new case openings has been increasing, but we just don't have the big ones that we had seen last year and in prior -- and the prior -- and the year before that. Also, second request work in connection with M&A was virtually nonexistent.

In Strategic Communications, the prolonged global economic downturn and dearth of capital markets activity continued to challenge underlying performance as clients squeezed discretionary spending. We also saw far fewer M&A and natural resources-related projects in the Asia-Pacific region, especially coming out of Australia and China, than we saw last year.

From a geographic perspective, as I mentioned, the third quarter revenues seem well correlated to what you would expect from the headlines and reports of relative areas of prosperity and recession around the world. In Latin America, our business grew 27%, and it's not surprising that 7 of our largest 10 cases there involved energy or natural resources. What's additionally encouraging is that the majority of them involved multiple practices of the firm, and this seems to be a healthy and growing trend. Our Economic Consulting, Forensic and Litigation Consulting and Corporate Finance/Restructuring activities in the region were all encouragingly strong.

In Asia-Pacific, as the region turned from a vibrant market to a slower one, as you might expect, our mix of activity has also changed to match that trend. We saw a significant decline in natural resources M&A activity, as I mentioned, but at the same time, we were very active in corruption investigations in areas like reverse mergers and investor fraud coming out of China and in corporate restructuring and recovery. We believe our acquisition of KMQ in Australia will prove to be very timely, as it adds 70 professionals with significant experience in energy, real estate and health care in the region, and this should help our other offices out there, the small ones but rapidly growing ones in places like Singapore and Jakarta.

In EMEA, again consistent with global headlines, our results were impacted by the macroeconomic slowdown in the region. Revenues decreased by about 4.7%. Particularly impacted was our Strategic Communications segment. Encouragingly, our Technology and Forensic and Litigation Consulting segments saw year-over-year improvements in the region. Of particular note was the performance of our GRIP practice, where the presence of an outstanding business intelligence, geographical, political risk group in the hub of London has complemented and completed our GRIP practice on a worldwide basis there and, hopefully, will be the catalyst to not only more but bigger investigations as many of those types of investigations and FCPA investigations seem to emanate from the city.

North America, again as you might expect, saw revenues down 7% year-over-year as demand was impacted by the slowing economic environment and uncertain political and regulatory backdrop and certainly, a lackluster capital markets.

In conclusion, if there was a single theme emanating from the quarter, it is that we continue to build and replace business from the record quarter a year ago, which enjoyed not only the pent-up demand from a recovering economy but the high-water mark in a number of high-profile, large investigations and cases that have since begun to taper off.

Looking forward, in the U.S., we have weathered the storm of the presidential election. We'll shortly know whether our leaders will avoid the fiscal cliff or embrace it in a continuing game of chicken. Either way, at some point, regulators will need to get on with regulating, enforcers will need to get on with enforcing, whistleblowers will need to get on with whistleblowing, and CEOs will need to get on with the business of business, including finance and acquisitions.

Speaking of acquisitions, as I mentioned, we continue to see healthy levels of new matters in Economic Consulting regarding preliminary and investigative work on potential acquisitions. It would not be unusual in economies where organic growth has been and will continue to be challenged and balance sheets are strong to expect renewed vigor with respect to acquisitions once the regulatory and tax framework becomes a little clearer. Acquisitions are where synergy and scale can help to replace some of the benefits that would ordinarily accrue from organic growth. Certainly, our experience would indicate that the groundwork is currently being laid by the buildup of cases we see in Economic Consulting.

As we have said many times, while we have broad-based practices and a diversified geographic footprint, the factors that can drive our company with the greatest immediate impact, either parochially or globally, are issues that have to do with liquidity; large investigations; and most of all, with vibrant merger activity. Such merger activity, M&A activity virtually touches every part of our company.

Certainly, if there were a watchword for the fourth quarter, it would be continuing caution and management of expenses. In addition to the uncertainty of the global markets, there is the lingering impact of Hurricane Sandy, although it appears that many FTI colleagues, consistent with performance during other times of duress, have continued to serve clients, in some cases, through heroic hardships. However, we cannot be certain at this time how we will recover. One of our office sites in New York was significantly damaged, although there is -- there are certain deadlines on things where we can hope that amount -- certain amounts of work have to be done by certain dates, so we know that our colleagues will rise to the occasion.

Again, as we stated in our press release, we will continue to invest in those areas where we believe we have significant advantages and can produce results. This would include areas of domain expertise, such as health care, energy, communications, media and entertainment, and insurance, and in geographic opportunities such as the aforementioned investment in the Australian restructuring practice. In addition, we intend to continue to repurchase our stock under the $250-million share repurchase authorization that our board approved in June.

With that, I would now like to turn the call over to Roger to discuss some of the specifics of the quarter and a couple of items as we look forward to the end of the year. Roger?

Roger D. Carlile

Thank you, Jack. As Jack mentioned, on October 2, FTI Consulting acquired certain assets of KMQ, and this acquisition brought our Corporate Finance/Restructuring segment to Australia and added expertise in our energy, real estate and health care industry solutions groups. KMQ will also serve as a growth point to expand our other segments into the Australian market. We see many opportunities to capitalize on the combination of KMQ's local presence and the solid reputation of FTI Consulting and FTI Consulting's global brand and deep expertise. There are many restructuring opportunities in Australia right now, particularly in Queensland, and our expanded team in Australia has already started to work with our Corporate Finance/Restructuring team in Hong Kong and in the U.S. to take advantage of these opportunities.

Beyond restructuring opportunities, we also see strong prospects for leveraging our industry solutions in energy, real estate and health care. While we expect this acquisition to add approximately $5 million in revenues and approximately $1.2 million in adjusted EBITDA in the fourth quarter, the amount of acquisition expenses that must be fully expensed in the fourth quarter will be greater than the adjusted EBITDA, resulting in an adjusted earnings impact -- negative -- an adjusted earnings per share impact -- being negatively impacted by approximately $0.02 per share. This expense is largely associated with the $2.5-million Australian stamp tax that must be paid on the acquisition.

On behalf of FTI Consulting, I would like to welcome our new colleagues. I look forward to working with them to advance our branded offering in the Asia-Pacific region.

As Jack also mentioned, during the quarter ended September 30, we took a special charge totaling $2.8 million, of which $400,000 was noncash. This charge reflects further actions to reduce excess real estate capacity in 3 office locations. These actions were initiated in the second quarter and recently completed. We expect the savings from these actions in the fourth quarter to be approximately $200,000 and the savings in 2013 to be approximately $900,000.

And with that, Jack, I'll turn the call back to you.

Jack B. Dunn

All right. At this point, as always, we'd like to get your questions, so if we could now open it up to questions, that will be great.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll go first to Dan Leben with Robert W. Baird.

First, on FLC, could you just talk a little bit about what the pipeline for deals looks like there and how much you think that, that has been impacted by the election cycle, regulatory uncertainties, et cetera? And just help us understand when that business can -- we could start to see some improvement there.

Dennis J. Shaughnessy

Yes, it's Dennis. The disputes business has actually been picking up business. The financial investigation side, as you can imagine, in this year's cycle, is where we've seen some of the slowdown. And then our data transaction people have had several big cases that they're on, that aren't going to go away, slow down dramatically over the summer. And we're starting to see some of those pick back up. So in disputes, we're definitely seeing a lot of new retentions. In actually, the FEDA business or the data analytics, again, we're starting to see some of these cases heat back up. And we would anticipate that once everything gets sorted through, that you get new enforcement people in place at Justice and some of the regulatory agencies, that the investigation side, which is starting to pick up some whistleblower-related cases over the last 60 days, we'd really start to see some benefit for next year. I think, while clearly we can't predict in the fourth quarter the impact of Sandy on our clients in the Northeast and how quickly they're going to get back to normalcy, which, to a certain extent, would drive how quickly our relations and business with them returns, I have no doubt it will be a significant source of business for us next year. I think the amount of dispute business related to insurance payments adjudications disputes is going to be significant. It's probably one of the largest damage projections that I think any of us have seen. I think we're only scratching the surface of estimates of the damage. And clearly, you're already seeing some reinsurance companies starting to argue over whether or not there should be the hurricane description applied to it, which, I think, most of the people in the Northeast knows changes their self-insurance rate, and in some cases, there are obviously hurricane exclusions in policy which could change the coverage. So I think we clearly anticipate that, that will drive a lot of FLC work, especially through our insurance industry group there in the first 6 months of next year and going forward.

Great. And as you look out to 2013, where are the areas that you're seeing opportunities for potential hiring versus areas where the headcount should be relatively flat?

Dennis J. Shaughnessy

Well, I think, clearly, our GRIP business globally is growing dramatically, especially out of Europe, and they are hiring in the GRIP business in Europe, as well as in South America. South America is up almost across the board, so in FLC alone -- and FLC, as we are opening new office out in Asia, are starting to man those offices, and we're just in the beginnings of manning Jakarta and building out Singapore. I would think in the U.S., right now, we're going to be very cautious because right now, we feel we are properly manned. We're always looking for new talent in the disputes area, and I think it's really going to be sort of driven by how quickly we see the forensic investigation group come back. Two industry areas which we are not alone in benefiting, I'm aware, but clearly, we have very large reach, is energy and health care. As Jack said in his speech, something like 7 out of our top 11 -- or whatever the number was down in Latin America, are energy/extraction natural resource-related. Our energy practice is growing here. Our health care practice here in the U.S. is over $100 million, and we're definitely hiring in those 2 areas because those 2 areas, one, we realize what the macro drivers going forward in health care are going to be; and two, energy seems to be immune, on a global basis, to whatever economic slowdown there is and clearly is in need for a lot of help.

Jack B. Dunn

We had a nice signature event earlier this month, which was we were profiled in a press release that Shell did on an analysis of energy policy in the Middle East and North Africa. And I think you're going to see more and more of a blend between our unique abilities on Economic Consulting and our governmental affairs practice as John Klick and others and Brian Kennedy coordinate to build an energy policy business that's global in nature. So we are extremely excited about those possibilities, and it seems, for those of us that have some experience with the health care industry, that regardless of whether there's a fiscal cliff or whatever, one of the places where there's absolutely going to be an unlimited need for business advisory, it's going to be in the health care, whether it's hospitals, doctors, plans, providers, whatever. That's going to be a vibrant area. And the good news in each of those areas is we have a launching point as we look across back of the envelope at our firm of $100 million of practice or more and some really leading experts. So those should be great areas for us.

Operator

And we will go next to Tobey Sommer with SunTrust.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

I had a question for you kind of longer term. What are your expectations to be able to grow your headcount? And what do you think your bill rate increases may look like over a kind of a bigger chunk of time?

Dennis J. Shaughnessy

I'll try first, Tobey. It's Dennis. I mean, clearly, we're going to grow our headcount in Asia and Latin America dramatically because I think the macro drivers are out there. And as we're expanding into new countries, new cities, it's a matter of building mass and building capability. So I think there -- and I think you'll see the application of capital from the firm besides, obviously, other tuck-in acquisitions. You're going to see the application of capital in those 2 geographic areas because of demand curves. So I think without a doubt, we would see more than doubling in Asia and Latin America over the next 5 years. And we think the demand is there. We think the runway is there, and we don't see any one, in all honesty, that has any kind of significant mind share lead to where we would be that concerned about being aggressively competitive. I think you would see us grow headcount in Europe more on an opportunistic basis. As I said, we're definitely growing our investigative group over there. I think you'll see restructuring grow as some of these nascent underlying issues are finally addressed in the various countries that we're all reading about. And I think that you'll see us look opportunistically for deals on sort of a step-out basis, where we see opportunities to broaden our position in Europe, even in the face of what's probably going to be a choppy economy over there in the next 2 years. We're finishing up our strategic plan for the next 5 years, and we're looking very hard at our position in North America. Obviously, in some instances, we have significant shares. In others, we have plenty of room to grow. I think in E Con, they have been doing a fabulous job on a global basis with expanding that expertise, and I think you will continue to see them bringing the best and the brightest from around the world into that fold. It has become a very, very attractive place for the large -- for the big-name economists around the world to start working. We're doing very well in spite of a very difficult market in Europe in our economics group over there, and we're doing extremely well in South America in the economics group that we acquired from LECG a year ago. So I would say you're going to see the operations at least double, so maybe by implication, an approximate double of the headcount in Latin America and Asia. I think you'll see us be opportunistic in growing the areas where we're seeing key demand in spite of choppy markets in Europe, and that would be in our investigative GRIP side, as well as in our restructuring side. I wouldn't be surprised if we didn't look to step out in Europe and take advantage of, obviously, what we're seeing as low valuations of potential deals. I think in North America, we'll pick our spots. It will probably be driven, Tobey, more by industry grouping. So it would be health care, energy, insurance are areas that we're already very strong in and we're seeing consistent demand in spite of a choppy economy.

Jack B. Dunn

Yes, the GRIP has been a star for us over the last couple of years. I mean, there is no CEO in the world that doesn't want business intelligence about the competition, about counterparties, about political risks, geographical risks. And I think we shouldn't underestimate the addition of filling out the dance card with a significant and very well-respected group in London. In addition to that group, we added a team that specializes in anticorruption compliance and remediation. So they would do things like monitorships. They've done them across the continent. And so that's really a platform that we're building out, and I think you'll continue to see us add headcount there because we have plenty of room to grow because it is very much a boots-on-the-ground in-the-jurisdiction type of practice. That's what distinguishes ours. We don't do analysis from afar. We actually have people that get on bus. As one of my clients told me, "You saved us because you had somebody actually get on a bicycle and go to a small town in the middle of China and get the original documents out, which proved not to be what they reported to be." So that will be a place where we'll add headcount.

Dennis J. Shaughnessy

Yes, and the second part of your question was on rates. It's probably a more difficult one to answer. I think in a lot of our enterprise-sensitive businesses, restructuring, crisis communications, foreign corrupt practice work, we don't really feel a lot of rate pressure globally. It's certainly in pockets, and we're not going to try to tell you that there aren't people that are competing seriously on rate. In the more generalized dispute businesses and in some of the investigation businesses, there is definite rate competition out there. The law firms are feeling it. The accounting firms seem to have been adopting a policy of very low rates as far as their quotes. And I think the other thing, Tobey, that people are trying to figure out, ourselves included, is more and more jobs are coming in on an alternative fee basis. And if you're successful, the rates look extremely high. If you don't necessarily hit all the milestones that are put out for the success fees, then the rates could look like a substantial discount below your posted rate. And I think, again, ourselves, law firms, people like that are now basically trying to make sure it that, on a project management basis, the projects are managed for the maximum efficiencies, so that we can guarantee ourselves the rates that we deserve for the value that's being conveyed to the client.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Just one question, a relatively quick one. Do you have any meaningful success fees that you know of that will hit the fourth quarter?

Dennis J. Shaughnessy

The answer -- we get this question every time, so I can answer it. We had -- we did not get the General Motors success fee in the third quarter. So that was not in the quarter. And while we're confident we're going to get it soon -- I think it's still better than 50-50 that it would fall in the fourth quarter. I think otherwise, we would expect sort of a normal relationship of success fees in the fourth quarter to be there. General Motors would change that impact, but we still don't -- it's in the hands of the court when they finally make the final resolution, which we know they're close to. But that doesn't mean it will fall into this quarter. It may fall into the first quarter.

Jack B. Dunn

Yes. When we referenced success fees in the press release and also in my remarks, it wasn't that it was a huge one. It was to indicate that given our business -- as you know, you have Michael Eisenband and his team, who do our great Creditor Rights practice. You have Ken Barker and Michael Biggs and their team on health care. Both of those are very much models where you have retainers and a success fee at the end. So it was really a -- it's an indication of, potentially, a change in business mix and our move towards alternative fees. And our experience to date has been our success fees are every bit as profitable, if not -- I guess the best way to say it is they're a win-win both for us and for the clients, so we certainly will enjoy looking for that more as part of a stable business model than waiting for a Hail Mary to come in one quarter or another.

Operator

And we'll go next to David Gold with Sidoti.

David Gold - Sidoti & Company, LLC

Just a quick question, a follow-up a little bit on FLC. Just curious on your insight on basically the outlook on growth from here. Is it simply a function of the timing of investigations and government hiring, which presumably corrects itself over the next few months as regulatory heads are replaced? Is it more the economy? Or do you think there's been some secular change over the last few years in the business as a whole?

Dennis J. Shaughnessy

Probably all 3, David. I think it's difficult. I didn't mean that to be glib, but I think it's difficult to try -- to then wait. We are, in particular at FLC, coming off an extremely difficult quarter to comp. And so the actual buildup in business this quarter and the buildup of business there over the year has not been that bad. It has simply been fighting the headwind of several monster cases that you're aware of that have finally burnt off, a couple of them which probably reached their zenith in billing in the third quarter of last year. I think that in the regulatory area, you're right, and I think that you're going to see it pick up. It has to. I don't think this administration is coming back in with an idea that there's a public mandate that they regulate less. They may not want to regulate more, and they just may want to be a lot more aggressive about sort of the actions they started in first term. I think in the disputes area, where we're seeing good business come in, I mean, that is normally the area, in all honesty, that you see affected by the economy. I think it has been down, as you accurately put it, the last couple of years. I think we're seeing it creeping back up. We are certainly seeing the MBS cases mature now to where they've been on the books for a while. And now both in E Con and FLC, our people are getting busy in those cases because on the civil side, they're maturing because, as you know, a lot of the state and federal investigations are ending. The fines are being paid. The settlements are being made, and that then triggers sort of the civil activity. There is no doubt that in certain parts of the world, we are seeing structural changes in the business. And I think that the biggest probably is what's happening to the law firms in alternative fees, with what's happening to a shift in the channel. Where a lot of this business came through an indirect channel, the law firm, more and more is coming out of the General Counsel's office. And so I think there, they're looking for broader master services agreements, broader reach, broader relationships. Clearly, they're looking to save fee, and I don't think that's going to go away. I think again, when it's -- that the enterprise problems, when it's crisis type of problems, big, huge complex problems, we're not seeing that. But in the normal amount of business, we are seeing a shift more and more into the General Counsel's office, making key decisions, looking for broader and deeper relationships, master services agreements, which are good for us given our reach and given the -- what we can. But they're clearly looking for fee consideration in exchange for those contracts.

Jack B. Dunn

David, this is your third trip to the rodeo with us. You've been with us long enough to see us go through these cycles, and it continually is bubble, then restructuring and then investigation, regulation and litigation. And I go back to 2002, when we had the dot-com burst and we had all the work that we did on the restructuring side. We had the Enrons, the WorldComs. And I think we're probably still in the litigation phase on Enron, although I imagine any year now, that will end. Then in 2008, you saw us have a tremendous bubble, and then you saw in 2008, in literally 3 months and through 2009, our restructuring business went up from -- I think it was almost -- the core business was up almost 60%. And then now you're seeing -- in my opinion, you're going to see, as Dennis says, the litigation phase on all the collateralized mortgage obligations and all those transactions, and you're going to see the regulation phase and you're going to see all the trials that follow that. What's interesting to me currently and why you see such an emphasis of us on Asia is because the last bubble was China. And you're starting to see egregious cases that would not quite rival Madoff, but they will be their own Madoff in a way. And we're doing -- it's no accident that our restructuring business is significantly up there and that we've invested heavily in that. It's no mystery that the SEC has focused people on looking at the deals of the reverse mergers and the other transactions that are coming out of the Chinese listings on the different markets around the world. So I think you're going to see some very aggressive investigation work and very aggressive restructuring, litigation work following that. So that would be an additional view that I would see in terms of where some of the big business is going to be coming from in the next year or 2.

David Gold - Sidoti & Company, LLC

Got it. So I think all of that is to say that the drivers are still sort of there. Some of it's timing; you've adjusted a little bit on the master service agreements; and at the end of the day, Asia is probably a better growth market for you in the next 12 months than U.S.

Jack B. Dunn

Well, it has the advantage of starting smaller, and as I say, having all the elements of a good, old-fashioned fight, so I think that's true to say. But I do -- I personally believe that in the litigation phase of the -- of some of the excesses we saw leading up to 2008, I think our -- I think that will be good, solid business for us. They're just now getting to the discovery phases and going from some of the regulatory matters that are settling in. You're seeing the civil lawsuits follow that, and that -- those will be very big because they're not only going to be class actions by some disappointed investors. You have big institutions looking at big institutions and governmental institutions looking at big institutions. So I think there will probably be a pretty good market for FEDA and for our disputes. FEDA, which is our financial and enterprise data evaluation practice, I think they'll be very healthy in the years coming on.

David Gold - Sidoti & Company, LLC

Perfect. One other simple one for Roger. Interest income and other, anything in there worth talking about on the other side?

Roger D. Carlile

No, I don't think anything specific. Typically, one of the things that swings that is foreign currency exchange in terms of balances on the balance sheet, and that, I think, was fairly muted.

Dennis J. Shaughnessy

David, one other way of addressing your question, too, on growth that we see coming in '13, there -- the E Con people in antitrust have more retentions than they've ever had in the history of the firm on a prospective basis looking at M&A. And I think we all know that there's not a lot of prospects for organic growth. The balance sheets of a lot of these companies are very strong, yet for some reason, people just aren't pulling the trigger. And we've talked to our colleagues in the investment banking communities, in the M&A, and they are basically telling us the same thing. They've never had more retentions, never had more people looking at things, and they've never been in a situation where none of these retentions have resulted in the actual consummation of a deal and therefore, the triggering of a lot of work to get the deals done, where obviously, we and they make a lot of money. If 1/3 of our retentions -- so assuming 2/3 don't work, if 1/3 of the retentions come to bear, our Economics group and our Technology group on the second requests and the FLC people in some post-merger integration work are going to be extremely busy. And now that is a guess. That's not a forecast. But something has to give. You just can't have these companies, with earnings slowing down, not a lot of organic growth available to them, best debt markets ever, unbelievable amount of cash on their balance sheets and looking at not one transaction but multiple transactions, all just sit on their hands next year and do nothing. So I would say if there's one sort of interesting indicator that could manifest itself across the board on 3 of the segments' business, it clearly could be there. And it would impact Strategic Communications, too, because obviously, they do a lot of work surrounding M&A transactions for either the targets or the acquirers.

Operator

And we'll go next to Paul Ginocchio with Deutsche Bank.

Paul Ginocchio - Deutsche Bank AG, Research Division

Just a couple of housekeeping questions. What was the FX impact to revenue year-on-year in the third quarter? And also, was the headcount growth in Corporate Finance/Restructuring, was that from the KMQ acquisition? Is that included at the end of the quarter in the...

Dennis J. Shaughnessy

Yes, the headcount growth was in health care and in Europe for, I think, obvious reasons. Health care, the drivers there are very strong, and in Europe, we continue to start to be brought in, in the beginnings of trying to solve some of these complex situations over there, and so they've been hiring there. Roger, I think you have the FX...

Roger D. Carlile

Yes, to be more -- and just what Dennis said was correct. The KMQ closed October 2. Those numbers, headcounts, otherwise, are not in the September 30 year -- month-end -- or quarter-end quarter [ph] numbers, so that headcount is not there. The impact on revenue from FX was about a negative 0.8%, and it had negligible impact at the EBITDA or earnings per share lines.

Paul Ginocchio - Deutsche Bank AG, Research Division

So what does Corporate Finance/Restructuring look like at the end of December with KMQ?

Roger D. Carlile

I think you can add about $5 million in revenue in the quarter for KMQ and about $1.2 million in EBITDA.

Jack B. Dunn

And 70 people, right, Roger?

Roger D. Carlile

70 people, right.

Paul Ginocchio - Deutsche Bank AG, Research Division

Okay. And then, Roger, any -- I got 2 follow-ups. Any -- do you want to narrow the $150 million to $175 million of operating free cash flow range at all with just one quarter left? And then just maybe Dennis or -- I guess, Dennis, as you look at Technology, I'm not sure how you -- do you look at the business sort of at Acuity, software, document review? Or how do you split that business a little further than -- so we can understand it a little bit better.

Dennis J. Shaughnessy

Well, I mean, I think if you look -- I think the basic ratios for the use of our technology, either on-demand, license, really haven't changed, so it's still about a 60-40 mix of what we would consider technology usage through on-demand, licensing or charging where we're actually using it as consultants in-job. The other 40% to 30% is the consulting side. So I mean, we've been very happy with the new releases in Ringtail. It has clearly made it more user-friendly. The response -- the initial response we've gotten back from the industry analysts as well as the market is that it's very good. Acuity has had a very good year, although it has been used in some of these big giant accounts, which are burning off. And so it will be impacted by the fact that it has to replace 2 huge relationships with new business. I think that the market in tech right now is trying to sort itself out. There's been some very, very big acquisitions. We only have anecdotal data as to how they're doing. We hear all the rumors that everybody else does about some of them working, some of them not working, and I think it has to sort itself out. I think we feel very good concerning our Technology portfolio. We continue to spend on R&D. And starting this year, we've put a direct sales force in to more align that selling effort with what we would see in the technology businesses that we compete against, and we think that sales force is starting to deliver good results now that they've been up and running for about 9 months. So the biggest problem there is, really, they, more than anyone, have client burn-off and they have 0, almost, second request work. And I think second request work is very intense; very high-margin; as you know, very short-term driven. It's a compliance-based type of work but very high stakes. And I go back to my comment. If any of these retentions start to mature, on the M&A side, we would expect to see that pick up.

Paul Ginocchio - Deutsche Bank AG, Research Division

And, Dennis, was there any revenue in the third quarter from those 2 big contracts that are winding down in Technology?

Dennis J. Shaughnessy

Yes. There was significantly less than what it was in the third quarter a year ago, but there was revenue.

Jack B. Dunn

They were less than last year, more than we thought.

Dennis J. Shaughnessy

Yes.

Paul Ginocchio - Deutsche Bank AG, Research Division

Can you -- do you think this is the run rate now? Or do think it keeps going down? And if it does keep going down...

Dennis J. Shaughnessy

No, I think our feeling is it will continue to go down. I mean, I think these cases have been tremendous cases for us, but they're -- I've got a caveat. Based off of what we see right now, the path of litigation, the path of investigation, it should continue to go down. All of that can change if something new develops. I mean, clearly, we are intricately involved in both of these things, and if something new, where there's new production, new issues come up, then it could pick up again. But I would say from a directional standpoint, we would see these declining on a continued downward basis to where, this time next year, they shouldn't be a factor in the company.

Paul Ginocchio - Deutsche Bank AG, Research Division

Can you help us size what -- how big those 2 projects are?

Dennis J. Shaughnessy

Well, we don't do that for confidentiality reasons. I mean, some of you know who the clients are because we've been outed in some of them, and we just don't give that kind of information out.

Paul Ginocchio - Deutsche Bank AG, Research Division

Okay. And Roger, any -- do you want to narrow that $150 million to $175 million operating cash?

Roger D. Carlile

Yes, on the cash, as everyone knows, the fourth quarter is typically one of our strongest quarters. We -- our third quarter, we had good collections, but we didn't narrow the DSOs at the rate that we would expect. However, we've had a good first part of the quarter on that. So I think all things equal, I'd say we're probably going to be more in the $140-million to $150-million range, depending on cash collections of our receivables.

Operator

And we'll go next to Jeff Rossetti with Janney Montgomery Scott.

Jeffrey Rossetti - Janney Montgomery Scott LLC, Research Division

It sounds like you guys are close to doing the -- maybe the next round of 5-year planning. I wonder if you could just take a step back and give us some color on what you think the organic growth rate of the business is. And any preliminary targets? There's been a lot of changes in the industry, and as you guys have talked about in the call, a lot of changes in just the fee structures, et cetera. Maybe you can give us an idea of what you think those numbers have adjusted to, and again, I'm not looking for any kind of guidance, just rough...

Dennis J. Shaughnessy

No, I mean, we're actually well -- we're well on our way, and we'll be presenting a fairly finished 5-year plan to our board coming up in December for approval in February. I mean, I think, one, in talking to our practitioners globally, about 93% to 95% of them feel that without a lot of acquisitions, there's no reason the company can't be at $2.5 billion in 5 years, so that would be $1 billion in growth. And I think if I did the math, that's like a 6% to 8% compound growth rate. So clearly, our last 5-year plan, we were growing organically more to -- at an 11%, but we were coming off a basis that we're $500 million. Now we're $1.550 billion to $1.6 billion. I think that where you will see the company change is, right now, we're at about somewhere between a 75 -- 70-25 -- 75-25 to a maybe 70-30 type of relationship, where 70% is North America and the balance is the rest of the world. In 5 years, you will see that number for the rest of the world go up significantly at least by 10 numbers, 15 numbers. So you'll see a lot -- the organic growth that you will see -- so I could have a scenario where if we don't do anything to broaden the base in Europe, we don't do any significant acquisitions, you might grow very low single digits in Europe, and it might be -- you might see restructuring on a cyclical basis grow a lot, but you might see some of the other areas fairly depressed simply because of the macro drivers in the market. Depending on how we come back here in the States, again, you might see some of the groups growing more rapid than the others, but again, you can make a case for middle to lower single-digit growth. There is no doubt in our mind we will be experiencing, no matter what the economic cycles are in Asia and Latin America, significant growth down in those areas. That would be well up in double digits and -- because your basis, one, are much lower, and two, just the macro drivers. And as Jack said, in China, it's a high-stakes game. So the assignments aren't small. They're very large. And in Asia and in Latin America, there isn't any significant players out there that we would be muscling for competition. We feel we've got very good runway. And while we're not trying to say there isn't good competition out there, we're not afraid of it. And so I don't think it would impede our growth. So I think -- if you needed a range, I would say low side, globally, 4% to 5%; high side, 8-ish on an organic basis, disproportionately driven by growth in Latin America and China. The assumptions for Europe without acquisitions would be low-single-digit growth. And for North America, a lot of it will depend on what we see coming out of the governmental sector, but again, not looking for heroic growth there. It could be sort of middle single digit. But overall, we feel pretty comfortable that with some acquisitions, we can double the company in 5 to 6 years. As I said, without any significant acquisitions, our SMDs feel there's another $1 billion worth of business to be had out there just through some hard work.

Jack B. Dunn

Yes. I think the other thing that's coming is the fiscal cliff, and it's not a question of a bunch of rich people having to pay a little higher tax. I think as we face that, I mean, you look at some of the ramifications. One area where we've been creeping up in our growth is in providing services to municipalities and to governmental organizations. I mean, you're talking about the military, which means pensions, which means the -- and municipalities where the hiring has been very bad and pension issues there. So I think there are a number of factors that -- there's going to be -- the litigation disputes business has grown at plus or minus 4% since -- for 50 years. The real issue is you have some fundamental changes, perhaps, in governmental and economic structure coming in the U.S. If that happens, that's where we make money because we advise clients regarding the smart way to do that and the challenges that arise from doing that. So I think there's a -- I think that's one of the issues of doing a strategic plan right now following the Great Recession and right before, at least, some kind of resolution for good or ill of those issues. So I think we'll have probably, hopefully, more to say about that. As you know, we put out our guidance at the end of the year in the first quarter. So stay tuned for that, but hopefully, we'll have a few of those things resolved by that time.

Jeffrey Rossetti - Janney Montgomery Scott LLC, Research Division

Okay. And just looking at the success fees and maybe kind of in tune with the discussion that we're having now, I mean, how have success fees grown as a percentage of your revenue? And how much do you think you'll -- it'll continue to grow going forward? It sounds like there's a business model shift taking place in some of your end markets in fee structures...

Dennis J. Shaughnessy

Yes. The answer is it's stayed fairly -- it has stayed fairly consistent. It's moved around, but it's stayed fairly consistent. As the revenues have continued to grow, I mean, obviously, if you look at us, I mean, our revenues from 2007 to, to date have grown dramatically, where a lot of other people have had troughs and then have come back. And it's pretty much stayed consistent, 6% to 7% of revenues during that period of time. The growth will accelerate, we think, because of basically a change to alternative fee structures, and that isn't necessarily something that we're pioneering, but it is certainly something that's not going away. And so I think that you're going to have significant growth in that area. I think we've all read articles where some of the leading law firms are saying that their business is now as high as 20%, 25% alternative fees, so not time -- not hourly based, not time and material. I don't see any reason why you wouldn't see us track, to a certain extent, some of their experiences. And I think that a lot of companies, as they take more and more of these decisions inside, are very comfortable with success fee, gain-sharing, anyway you want to name it. And they understand part of the quid pro quo is they need to shrink their relationships and have bigger and stronger relationships and have more of a partnering relationship than sort of a client-vendor relationship. So I think that will grow. I don't see any reason why -- I don't see anything that shows us that it would stop. But for the last 6, 7 years, it really hasn't grown that much. I think it's only now we're starting to see -- and more and more interesting that I think as our health care practice goes -- grows, that is a model that has been accepted for years in health care practice and to where it's almost not even success fees as much as you simply have milestone-driven fees, where you get a capitated fee and you might have 4 or 5 milestones over a 2-year period engagement, and as you hit certain milestones, increased fees are released to you. Now if that's success, I guess it is, but it's much more sort of the way business is done there, so...

Jack B. Dunn

I think I agree with Dennis. I'd like to see it grow from that 2% or so area up to get to be around 6% or so or even more. We'll be helped by that because a couple of the areas where success fees also come are in refinancings in terms of restructuring. And obviously, it's been a tough financial market. And also, in our Strategic Communications business, in all their capital markets business, there is a success fee component. So I would think we'll be helped both by a change in mix in our business, getting back to some more vibrant markets on that side, and will also be changed by the mix within businesses where, as Dennis says, health care will be growing. But inside restructuring, we'll probably see more cases where the clients would like to see us as their partner in the success of the enterprise. If you think about some of our businesses, it's hard for expert witnesses to take success fees because it's not a good factor on the witness stand for the witness to say he has [indiscernible] the outcome. And there are other businesses where it's not traditionally done, but in most of them, we're looking to work with our clients for these win-win situations. And I'm sorry. You had another question?

Jeffrey Rossetti - Janney Montgomery Scott LLC, Research Division

Yes, no, I just wanted -- I mean, it just seems like coming out of the economic downturn, that a number of business models are being reevaluated. And certainly, on the consulting side, you're seeing success fees become a bigger part. And I was wondering, if you look at your 5-year plan, I mean, what would you -- just within the top 2 or 3, what would you call out as your -- the changes to the business model that you're recognizing, if they are there, and how you would address those? It sounds like real estate is one. It sounds like success fees is another, but I'm just wondering if you're seeing the business model shift.

Jack B. Dunn

Really, #1 is providing a solutions model to our clients as opposed to a restructuring or a strategic communications. If you would see the enthusiasm around our people for instead of going and saying, can I introduce you to somebody else, and organizing as teams across industries, that -- I think in terms of the inspiration and perspiration of our young people, that's where it's focused because they think we really have something unique compared to other providers. So that would be -- we can go around the table and each have a pick. That would be my pick. Dennis?

Dennis J. Shaughnessy

Well, I think the biggest change is clearly the problems are globalized. And I think that even for mid-cap type of companies, their problems don't stop anymore at the shores. And so I think that's clearly one of the biggest changes that we see in our client relationships, where our problem may emanate here or it may emanate in Europe but then it spreads across their footprint, which is now global. I think the -- again, I think there is no doubt in our mind that certain relationships are going to change and become more partnering relationships. I think it's a little difficult to put a number on it or put a percentage. I think that, as Jack said, it is still very tough to have any kind of gain-sharing if you're rendering expert opinion. It is almost an immediate sort of red flag for the impeachment of the credibility of the work. But I think in restructuring, we're certainly seeing -- on the creditor side, 5, 6 years ago, you would have never heard of success fees there. Now you're starting to see that as an everyday thing that's coming in. I think we already talked about health care, where we expect a lot of money to be spent, and we expect that it's going to be on a gain-sharing basis for the most part going forward. And I think that certainly, in general administrative type of investigation work, things like that, we are already signing master services agreements with huge global companies, where it specifies a broad base of services that they would do with a built-in fee structure, where we anticipate getting all the work or the vast majority of the work as part of the consideration for signing these market services agreements. So I would say you'll see more master services agreements with the big global companies, you'll see more work dependent upon your ability to solve problems offshore, and I think you will see more success fees in certain parts of the segments. David?

David G. Bannister

The other factor that we're seeing is 5 years ago, probably 60% or 70% of our business came through indirect channels, so our very important relationships will continue with the banks and the law firms and so forth, our friends and partners in helping solve client issues. Five years from now, we think that between the industry model and the nature of the solution services we're providing, we'll be dealing much more directly with the C-Suites and the Boards of Directors of the Fortune 200, FTSE 100 type of companies around the world. If we looked at our largest 10 engagements over the last year, that's really what they have become, is those direct relationships dealing with enterprise issues, where the enterprise is the client, not the law firm or the bank.

Dennis J. Shaughnessy

And Roger?

Roger D. Carlile

I think I agree with Dennis. I think it's going to be a shift to having corporates more involved and clients more involved in the relationship and the buying decisions of their consultants. And that has some positive effects of sort of reducing the hunting range to identify the locations, but it requires us to be more focused on what those clients see as value, which I think comes back to the point that they're going to be looking for total solutions.

Operator

And we'll go next to Tim McHugh with William Blair & Company.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Most of my questions have been answered, but just 1 or 2 quick ones. First, on the forensics and, I guess, broadly, can you just give us an update where turnover stands year-to-date? And just to be clear that any of the weakness there, it's more, in your view, market-related than anything having to do with internal turnover or other issues like that.

David G. Bannister

It's Dave Bannister. I was just working with Neal Hochberg on it the other day. We have not lost significant producers or people who have generated significant business. That's not a factor in any issue there. We would say that we have customary turnover in terms of headcount, again, primarily the junior level. We did make some sizing decisions earlier in the year, where we unfortunately had to separate some very good folks who just weren't -- the markets they were operating in weren't producing at the level that we had hoped they would. But I don't think that turnover as a result of competitive pressures or other things has been a significant factor there.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Okay. And in terms of the restructuring implemented at the end of 2Q there, Roger, I mean, do we see the full impact of that on both the revenue and the profits in this 3Q? Or is there still some of that, that probably wasn't fully reflected yet for the quarter?

Roger D. Carlile

No, I think you're seeing the full effect of -- on the revenue and the costs. I think as we said at the time, and as Dave just referenced, the people that we unfortunately had to let go were either for -- probably underperforming or were, in some respects, not aligned or needed for the current capacity levels. So the revenue impact was sort of minimal in that regard. You haven't obviously seen -- because the third quarter is seasonally a down quarter, you don't -- even though the costs are all -- the savings are all being achieved, you don't see that fully in a margin uptick at this point.

Dennis J. Shaughnessy

Yes, Tim, I think that would be the key thing. I think from the point of view of the math, with the exception of the real estate closings that Roger talked about, pretty much it's all done. But I think the first quarter that we had the benefit of the cost reduction is historically our worst quarter of the year, our slowest quarter. And so you're just not going to feel it in the margin. It should pick up more in the margin as we move forward.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Okay, great. And then last question on the e-Discovery or Technology segment, it picked up sequentially there. Were any of those -- did those large engagements pick back up at all? Or was that -- I guess, what else did you see there that showed a benefit?

Jack B. Dunn

We saw some light there and we saw some new large engagements. So we're -- relatively, we were fairly pleased with that, so I think it was -- and I think the new sales force did -- we are starting to see some traction in new cases. They're not the big ones that we traditionally have, but we did pick up a couple of large matters, and interestingly, as has always been the case, some of those were from people who had tried the low-cost competitor and found it wanting. So that's also another reason we have belief in this business long term.

Operator

And we'll go next to Kevin McVeigh with Macquarie Securities.

Kevin D. McVeigh - Macquarie Research

It sounds like there'll be some incremental revenue around Sandy in 2013. Can you just remind us how you fared around Katrina and if that's kind of a reasonable proxy for what we should expect across the business lines, or a little bit stronger than that just given the scale of Sandy?

Jack B. Dunn

Yes, I don't want to be too much of a vulture, so realistically, we didn't have much coming out of Katrina because it wasn't the -- to be blunt, it wasn't the economic capital of the world as New York is. And heaven forbid, but if you look at a situation where businesses were impacted dramatically with the World Trade Center, again, we've been doing -- working on business interruption issues and all kinds of real estate issues for -- we were -- we had some significant roles there in arbitrating disputes and things like that. So I think because of the location, and as I say, our hearts go out to them, but for good or evil, it was much more devastating in terms of the economic ramifications in lower Manhattan than it was in economic, although in personal suffering, it's like you can't just -- both are just tragic.

Kevin D. McVeigh - Macquarie Research

Understood. And then just -- it sounds like, if I heard it right, kind of alternative fees came up about 5 or 6 times on the call, and it seems like that's going to be kind of more of a shift going forward. How does that impact kind of the revenue recognition, number one? And then number two, given the very variability, is that going to change the compensation in terms of how you approach compensation across the consultant mix?

Dennis J. Shaughnessy

Right now, it's been our policy -- we do not recognize success fees until we get them. So our accountants will go probably crazy by my statement because we're not a cash accounting company. But realistically, we don't do a percentage completion type of accounting. We recognize the fee when, in fact, whatever milestone has been reached and we get it. I'm not going to say that would continue forever because that's probably not a smart thing to say. If those fees change, the way they're booked and recorded differently, but it just seems to us to be the safest thing and the smartest thing to do vis-à-vis our results and your expectations. I think you raised a good point on compensation, and some of the groups already -- we have actually pegged some of the bonus payments to the payments of success fees. And I think as you see more success fees or more alternative fee arrangements come in, I think you would see us take more action to try to link some of the individual variable comp directly to that success.

Jack B. Dunn

I am very glad you asked that question because if anybody walks away from this call thinking that the major issue was a change of our business to success fees, we have failed dramatically. It happened to be a period where in one of our segments, we noted that there had been a slight mix shift between the percentage of success fees versus chargeable hours. It could be nothing more than that, but it happens to be coincidental with a move in the market towards more use of success fees and growth of certain businesses we have. But I don't think it will be a fundamental change in how analysts look at FTI in the next couple of years. I really do not.

Roger D. Carlile

And, Jack, maybe I -- as one of the accountants, basically, I wanted to add to that, that we have -- I mean, you can read it, obviously, in our filings. We have strong revenue recognition policies around these. None of that -- whether it shifts or not does not impact how we're doing the revenue recognition. As Dennis is referring to, there's multiple kinds of alternative fee arrangements. You can have fixed fees, capitated rates, a variety of different things. And obviously, all of our revenue recognition is based on appropriate accounting guidance, but it ensures that we don't recognize revenue before it's actually earned and that it's recognized in an amount that would be greater than what's earned at any point in time.

Operator

And we'll go next to Randle Reece with Avondale Partners.

Randle G. Reece - Avondale Partners, LLC, Research Division

My main question when it comes to success fees and the shift in the market is if it's going to change your core billing rate with you accepting a different typical hourly billing rate upfront in exchange for deferred benefit on the back end, and if that would lead to lower margins until the success fee revenue catches up.

Dennis J. Shaughnessy

It's a good question. I mean, again, I think the issue of success fees isn't the issue as much as it is alternative fees. So classically, these consulting businesses, the professional services business, law and accounting operated on a time and materials basis, so hourly billing. So what you're seeing is a change in client desires away from hourly billing to alternative fees. Success fees are part of an alternative fee package. Master services agreements, where there tends to be a quoted set of fees, and it could be hourly, against a guaranteed source of revenue, is an alternative fee arrangement. So I just wanted to clarify that there are milestone-driven success fees, and then there are alternative type of fees. You are totally right. I think, for example, in health care, oftentimes the projects are broken down into 2 areas. You have an investigative phase and then you have an implementation phase. And oftentimes, the fees on the front end are much lower. When you go into the implementation fee -- stage, you tend to have higher rates, which may be a monthly capitated rate. And then you have milestone-driven success fees going forward. Across the life of the projects, if you're running the projects right, the fees should reflect the value for the service. It's a different way of getting there.

Jack B. Dunn

And also, as this -- as these -- I mean, I now understand why the Supreme Court doesn't answer hypothetical questions because we could go on with different permutations. But by the time success fees for FTI become more of the 2 to maybe up to 60% that we talked -- 6% we talked about, they will be institutionalized, so it won't be all of them coming due in September, so for the first 8 months of the year, you'd only have lower rates that you charge. They will roll in different increments. They'll be -- they typically are based on such things as profit enhancement. They're based on being able to refinance a transaction. They're based on the sale of a transaction. They can be based on milestones as you go through the year. So as they become more a part of the fabric of what we do, they will consistently roll on and off during the year. So I don't think you'll see a big blip, where every year we would expect our hourly true-up to be in December as we wait for the success fees to come in. I think it's a normal part of businesses that are growing here that have a history of that. As I mentioned, Creditor Rights and I mentioned health care are the 2 primary ones.

Operator

And at this time, there are no further questions in the queue.

Jack B. Dunn

Great. Well, thank you all for being with us, and again, the next time we talk to you, we will -- hope we see the results of yesterday's election and some other events. And we will be presenting our year-end results with our guidance for next year. So thanks to everyone, and we'll talk to you then, if not before.

Operator

And this concludes today's conference. We thank you for your participation.

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